Clubs spend £30 million in January transfer window

Player transfer spending by Premier League clubs was around £30m in the January 2010 transfer window, according to analysis by the business advisory firm Deloitte.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “The limited player transfer spending in January by Premier League clubs matches our expectations for this window. As managers, club owners and directors become increasingly sceptical of the near term impact a January acquisition can have, it is unsurprising to see a lack of high value activity, with those clubs that are active preferring loan deals. The absence of new club owners and the tightening of club finances and credit availability have helped to accelerate that trend and dampen down the market.”

Commenting on the contrast to the gross player transfer spending of £170 million in the January 2009 transfer window, Jones commented: “Premier League clubs’ record level of transfer spending in January 2009 was particularly fuelled by new owner-team manager combinations, with over 50% of the spending by Manchester City and Tottenham Hotspur. The relatively low level of transfer spending by Premier League clubs in January 2010 is broadly consistent with the situation of top division clubs in France, Germany, Italy and Spain.”

Some of the key findings from the analysis by Deloitte include:

• Premier League clubs have committed to around £30m in respect of player transfer fees in January 2010 (2009: £170m; 2008: £150m; 2007: £60m; 2006: £70m; 2005: £50m; 2004: £50m; 2003: £35m).
• Spending between Premier League clubs accounts for around half of all Premier League clubs’ transfer spending.
• Premier League clubs’ net transfer spend was just £10m (2009: £45m), being the net amount that flows to non-English clubs and Football League clubs.
• Around 70% of Premier League clubs’ player transactions (in and out) in January 2010 were loan arrangements.
• Previously, Premier League clubs’ transfer spending in the January window has typically far exceeded that in other European leagues. In January 2010, spending by Premier League clubs has still significantly exceeded that disclosed for the top division clubs in France, Germany and Spain, whilst Italian Serie A clubs have reportedly spent around £30m on player transfers.

Reflecting on the overall position of Premier League clubs, Alan Switzer, Director in the Sports Business Group at Deloitte said: “The fundamentals underpinning Premier League football clubs – a loyal supporter base, high quality stadium facilities, a strong relationship with broadcasting and attraction to commercial partners, and for the biggest clubs, an enviable global reach - remains strong regardless of the economic climate. The wider economic realities have led to a flattening, but not a reduction, in Premier League clubs’ revenues. When the new international broadcast rights arrangements are concluded this year it will affirm the global popularity of the competition and we expect the clubs’ revenues from this source will be significantly enhanced from 2010/11.

Switzer added: “The fundamental requirements for a sustainable business model remain the same as always; for clubs to appropriately manage their cost base, particularly player wage costs, relative to their largely predictable revenue streams.”

When the Deloitte Football Money League is published next month, it will confirm the position of several Premier League clubs amongst the ‘Top 20’ highest revenue generators in the world.

Ends

Basis of preparation
The information on player transfers is based on publicly available information in respect of player registration acquisitions by clubs, including from www.bbc.co.uk and www.premierleague.com, and further analysis carried out by the Sports Business Group at Deloitte. The information is based on reported transfers as at 18:15 on 1 February 2010. Further commentary about the transfer market is included in the Deloitte Annual Review of Football Finance. The figures contained in this release will not necessarily be the same as the cost of acquiring players’ registrations as recognised in the financial statements of each club. Under accounting requirements, the cost of acquiring a player’s registration includes the transfer fee payable (including any probable contingent amounts), plus other direct costs such as transfer fee levy and fees to agents.

About the Sports Business Group at Deloitte
Over the last 15 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.

For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk\about for a detailed description of the legal structure of DTT and its member firms. The information contained in this press release is correct at the time of going to press. 

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